Stabilized Properties: An Alternative Investment with Low Risk and Consistent Cash Flow
As part of Bayfield’s strategy to bring maximum return to our high net worth private and institutional investors, a core part of our strategy focuses on expanding our portfolio of stabilized commercial and industrial properties across Canada. The reason is simple: stabilized properties provide the opportunity to invest in a safe asset that provides a predictable, consistent stream of cash flow to the investor.
Identifying a Stabilized Property
Throughout the years, Bayfield has developed the acumen for identifying and acquiring stabilized property opportunities in the commercial retail space. Our focus on ensuring that the anchor tenants and location elements of the property all meet our criteria prior to acquisition results in investments that assure predictable, consistent revenue. The following are the qualities we look for in a determining a stabilized property:
Occupancy
The property must be at market occupancy rate (95%+).
Lease Rates
Lease rates must be at market price (not below or above).
Tenant Rollover
Rollover must be insignificant, so that there are not a large number of leases expiring in the short term or at the same time.
Capital Improvements
There should be minimal capital improvements required to maintain the property’s current operating standards.
Investment Risk = LOW
Stabilized properties are considered core investments and are viewed as least risky. While they do not generally provide a significant appreciation in value, they are attractive for their ability to provide a steady stream of cash flow.
Is It For You?
If you are an investor who prefers to have predictable cash flow with low risk and want something more attractive than corporate bonds or publicly traded equities, investing in stabilized properties should be the alternative investment option to consider.
